Live Trade – USD/CHF

Filed under: Live Trades |

I currently have a live trade on the USD/CHF forex currency pair, and I would like to talk you through this setup right now.

 

Figure 1.

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the USD/CHF pair (the exchange rate between the United States dollar and the Swiss franc), and it is the only chart that we will need to look at for this particular setup as all the information that we need is contained here.

 

What you can see is that the 8-day exponential moving average has been crossed below the 21-day exponential moving average for quite a while, and the chart has been visibly moving down from left to right. This tells us that the market has been bearish. I have also marked in a significant area of support/resistance on the chart (marked with a horizontal green band and a thin red line). This area is actually a very strong one, and if you look back further on this pair, you will see that it has been relevant on a number of occasions. Therefore, this was a good area to look out for any bearish price action signals.

 

What you can see is that price has formed a number of bearish pin bars at this level. The first pin bar also happened to be a 50% Fibonacci retracement area – adding some confluence to the setup. Two more pin bars have followed this, each with lower highs. It is at this third pin bar that I decided to put an order in at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the pin bar, and a nice risk-reward target set of 2.5 times the risk. This is currently in profit to an amount equal to that of my risk. Moreover, I have since moved the stop to breakeven giving us a risk-free trade.

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